There’s a big hitter in the cryptocurrency space right now, that seems to be slowly creeping up and staying out of the limelight. The world’s 4th largest cryptocurrency by market cap, Ripple (XRP), has made major moves this year with financial institutions across the world and is continuing its ascension in the cryptocurrency market.
Launched back in 2012, XRP has begun to stand out from the rest due to its blockchain-like rail that settles international payments much more quickly than the technology currently used. Its technology is completely separate from Bitcoin, and Wall Street institutions have been much more comfortable with the blockchain technology than the actual cryptocurrency.
XRP currently has 77 banking clients already using its blockchain technology with big names such as Royal Bank of Canada, Bank of America, Standard Chartered, BBVA in Spain and Axis Bank.
Ripple’s CEO Brad Garlinghouse states:
“Our pace [of signing new clients] has dramatically increased. I also think people are getting more comfortable with blockchain technologies. It’s no longer a science experiment. It’s not theory, it’s very real.”
The blockchain is a permissionless ledger that is decentralized and records every single transaction made. Startups, like Ripple, are now viewing the blockchain as a service and are developing the technology to be used in different sectors such as food shipment tracking and agriculture. Banks are most interested in XRP’s tech to improve the efficiency of their transactions, specifically overseas, and to cut costs.
It’s a no-brainer to adopt Ripple’s tech into current banking systems as it offers cheaper transaction rates and faster transaction times. The customers of the bank don’t necessarily need to know or care if they are using Ripple tech but will notice the faster transaction time in doing so. Ripple can also be used for in-country payments and most the Japanese banks use this for its local payment platform.
XRP’s Consensus Ledger is able to process 1,000 transactions per second and it only takes three seconds, on average, to settle international payments. Bitcoin’s blockchain, on the other hand, is currently at two hours per transaction due to its limited block size. To be fair to Bitcoin, institutions such as the Western Union, take a lot longer than two hours to clear transactions domestically.
As Ripple continues to improve its technology and branch the sectors in which it targets, it could surely give the original blockchain a run for its money, long-term, based on tech alone.
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